The present invention relates generally to a system for processing the sale of goods and services and, more particularly, to a system for managing the sale of goods and services by one or more sellers to a group of buyers who have submitted purchase offers for the purchase of such goods and services.
Most systems for processing the sale of products are seller-driven, whereby the seller prices, packages, configures and offers the product for sale, and the buyer decides whether or not to accept the seller""s offer. In a buyer-driven system, on the other hand, the buyer dictates the terms of the offer and one or more sellers decide whether or not to accept. A xe2x80x9chelp wantedxe2x80x9d advertisement, for example, is a buyer-driven inquiry since the employer is looking to locate and buy the services of a qualified employee. The inquiry is advertised to a large number of potential employees, who may respond by submitting their resumes to the prospective employer.
Many large organizations, such as corporations or government entities, utilize a buyer-driven system to purchase goods or services at the lowest possible price. Initially, the purchaser formulates a detailed written specification, typically called a xe2x80x9cRequest for Proposalxe2x80x9d (RFP), setting forth the quantities and requirements of what the purchaser is looking to buy. Once finalized, the RFPs are distributed to a list of known potential suppliers. Potential suppliers then screen the RFPs to identify those that they might be able to fulfill, and thereafter determine whether or not to invest the necessary time and effort to submit a formal, legally binding proposal to the buyer by a deadline established in the RFP. Once submitted, the proposals are evaluated by the buyer, and the chosen supplier, corresponding to the selected proposal, is notified that it has xe2x80x9cwonxe2x80x9d the business at the price quoted.
Large organizations can take advantage of the benefits afforded by the RFP process because their volume buying represents a worthwhile opportunity for suppliers to compete for their business. In addition, large organizations have the resources to communicate their buying needs to a sufficient number of suppliers. As a result, large organizations can often achieve substantial unit cost savings, especially on commodities or commodity services (such as office supplies, insurance or long distance service) and on perishable items (such as airline tickets and hotel rooms). Individual consumers, however, cannot effectively participate in the RFP process with current systems because they generally do not have the bulk buying power and resources of large organizations.
While there have been attempts to utilize the Internet to effectuate bilateral buyer-driven transactions between individual consumers and sellers, those attempts have been largely unsuccessful. For example, buyers can post xe2x80x9cwantedxe2x80x9d advertising at little or no cost on xe2x80x9cbulletin boardxe2x80x9d type Internet sites. Thus, consumers can essentially post their own RFP to a large number of potential sellers. In practice, however, it is impractical for potential sellers to frequent the various xe2x80x9cbulletin boardxe2x80x9d sites or respond to the individual RFPs which typically have diverse formats, conditions, terms, and language styles. In addition, sellers are deterred from using such a process because there is (i) no guarantee of the authenticity of the RFP, (ii) the cost of negotiating with individual consumers is often too high, and (iii) it is difficult to enforce any agreement (including payment guarantees) which may be reached between the consumer and the seller. In turn, the absence of a critical mass of sellers reduces the incentive for buyers to post their RFPs.
Thus, current systems do not permit individuals to effectively utilize the buying power associated with volume purchases to achieve the same substantial unit cost savings which are available to institutional purchasers, especially on commodities and perishable items. While prior systems have attempted to exploit the purchasing power associated with groups of consumers, no prior system has solved the above-mentioned problems of authenticating the group""s offer and enforcing any agreement reached between the group and the seller.
The aggregation of buyers provides benefits to sellers as well. For example, it is well known in the insurance industry to provide insurance to groups of individuals at a reduced price. The cost savings are attributable, at least in part, to the reduced costs incurred by the insurance carrier in negotiating a single group policy, as well as to the reduced ongoing administration costs. Again, no prior insurance system has solved the above-mentioned problems of authenticating the group""s offer and enforcing any agreement reached between the group and the carrier. In addition, no prior insurance system permits an offer for a group insurance policy to be formed based on a plurality of offers received from individuals, such as self-employed individuals, attempting to obtain the cost savings associated with group insurance.
As apparent from the above deficiencies with conventional systems for selling goods and services, such as insurance and travel-related services, a need exists for a buyer-driven system that permits a buyer to obtain goods and services at a price set by the buyer, at a price typically below the retail price. Yet another need exists for a system that permits sellers to stimulate sales of excess inventory, without compromising the seller""s published price structure. Another need exists for a system to administer CPOs on behalf of groups of buyers, and thereby provide individuals with group discounts and other benefits associated with volume purchasing.
Generally, according to one aspect of the invention, an aggregate conditional purchase offer (CPO) management system is disclosed for receiving and processing individual CPOs from buyers for one or more goods or services. The aggregate CPO management system processes each received CPO to determine whether the CPO should be provided to sellers individually and/or collectively as part of an aggregate CPO, comprised of a plurality of individual CPOs. If a seller accepts a given CPO, either individually or collectively as part of an aggregate CPO, the aggregate CPO management system binds the buyer(s) on behalf of the accepting seller, to form one or more legally binding contracts. A CPO is a binding offer containing one or more conditions submitted by a buyer for the purchase of goods or services or both, such as travel or insurance services, at a buyer-defined price. The CPO may be guaranteed, for example, by a general-purpose account, such as a credit or debit account.
The aggregate CPO management system administers individual CPOs on behalf of groups of individual buyers to form aggregate CPOs, which are offered to sellers. In this manner, individuals are able to obtain group discounts and other benefits associated with volume purchases. The aggregate CPO management system preferably forms groups dynamically in accordance with predefined aggregation rules. Individual buyers may not know that their individual CPO has been aggregated as part of a group into an aggregate CPO. In one embodiment, the aggregate CPO price is an average of the individual CPO prices for each CPO included in the aggregate CPO. The aggregation rules can optionally require that the terms of an individual CPO, including price, be within predefined tolerances of the terms of an aggregate CPO or one or more pending individual CPOs, in order for the individual CPO to be included in an aggregate CPO.
The aggregate CPO management system preferably permits a buyer to review pending aggregate CPOs, prior to submitting a new CPO, so that the buyer can request to include a CPO in one or more existing aggregate CPOs. Thus, buyers can ensure that the conditions of their CPO for the purchase of goods or services can meet the conditions of the requested aggregate CPOs. In addition, the aggregate CPO management system can request a buyer to modify the original terms of a CPO to conform the terms to an existing aggregate CPO or one or more pending individual CPOs, so that the modified CPO can be included with the pending aggregate CPO or the pending individual CPOs to form a new aggregate CPO.
A buyer""s CPO can optionally be provided simultaneously to sellers individually and collectively, as part of one or more aggregate CPOs. If the buyer""s CPO is first accepted as part of an aggregate CPO, the status of the accepted aggregate CPO and the individual CPO is changed to xe2x80x9ccompleted,xe2x80x9d and the terms of the other non-accepted aggregate CPOs, if any, are adjusted to reflect the removal of the individual CPO. If the buyer""s individual CPO is accepted first, the status of individual CPO is changed to xe2x80x9ccompletedxe2x80x9d and the terms of each aggregate CPO is adjusted to reflect the removal of the individual CPO that was simultaneously included in the aggregate CPO.
A more complete understanding of the present invention, as well as further features and advantages of the present invention, will be obtained by reference to the following detailed description and drawings.